Citi separated its institutional banking operations in Mexico from Banamex, which covers retail and small- and midsize business banking in the country, the bank announced Monday.
Effective Sunday, Citi began operating two financial groups — Grupo Financiero Citi México and Grupo Financiero Banamex — setting the bank up to spin off Banamex in an initial public offering. Regulatory approvals will drive that timeline, Citi said Monday. But the bank has long targeted the IPO for 2025.
Citi CEO Jane Fraser called the separation “an important milestone in our simplification,” adding that it “brings us closer to our long-term vision of a more connected bank that is focused around our core strengths.”
The split leaves Citi México with roughly 3,000 employees, serving about 2,000 clients, the bank said. That compares with a network of 1,300 branches and 39,000 employees serving about 20 million clients with Banamex.
Citi has said it expects to sell 15% to 20% of its Banamex stake in the IPO, depending on market conditions, The Wall Street Journal reported, and sell off the rest of its holdings over time.
The bank is staying open to selling Banamex outright, though, or finding an anchor investor to take a stake, Citi CFO Mark Mason told the publication.
“If that’s something that comes up, we’ll examine it,” he said.
The spinoff, he said, “will free up capital to reinvest in some businesses that generate higher returns.”
“Does Banamex fit the strategy? It’s a great business, but no,” Mason said.
Citi last year reportedly came close to selling most of its Mexico retail operations to Grupo Mexico in a deal worth roughly $7 billion.
But Mexico’s then-president, Andres Manuel López Obrador, repeatedly weighed in on the deal, saying he would require job protections for workers and forbid Citibanamex’s art collection from leaving the country.
Citi walked away. But Fraser reportedly met with López Obrador’s successor, Claudia Sheinbaum, this year, emphasizing Citi’s pledge to continue serving Mexico with corporate banking and wealth management businesses.
Incidentally, the art collection is staying with Banamex, Citi said in Monday’s announcement.
Banamex has given Citi roughly $4.7 billion in revenue over the first nine months of 2024 — or about 8% of the bank’s total, on par with the New York City-based bank’s corporate- and investment-banking operations.
Fraser made public Citi’s plan to exit retail banking in Mexico in January 2022 — long before the bank launched its reorganization last fall but after laying out plans to leave 13 other international consumer-banking markets. Citi has exited nine of those markets, the bank said Monday, adding that its wind-downs in China, South Korea and Russia are “nearly complete.” A sales process for its Poland presence is underway, it said.
